Several weeks ago I wanted to by a Macintosh and checked Craigslist to see if there are any good deals. I found an amazing deal for a Mac Book Pro for $1200; it sells for $2000 at the Apple Store. I sent a quick e-mail asking if I can come and take a look. A day later, I got a reply back; "I still have the laptop. But the thing is that I'm in the U.K. for my school (I have the laptop with me)...." and a way for us to complete the deal fast. This was just what I expected... a student in UK, trying to sell his laptop in Atlanta for dirt cheap. I have heard of this scam too many times, so I elected not to pursue this any further. But it looks like Wachovia and Citigroup have fallen into this same exact trap buying Credit Default Swaps from a tiny company in an inaccessible jurisdiction. With people like this running our financial system, I don't know whether to laugh or to cry! Truly amazing!
Here are some very interesting and disturbing eye openers that talk about the crisis we are facing.
- The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster
- The $55 trillion question
- Credit Default Swaps: Evolving Financial Meltdown and Derivative Disaster Du Jour
- Are You Exposed to Credit Default Swaps?
- Credit Default Swaps: The Next Crisis?
- Mark-to-Market vs. Mark-to-History
- Fairfax Financial Sells Credit Default Swaps for C$574.5-Million
- The Monster That Ate Wall Street
- Tying Interest Rates to CDS Is a Recipe for Main Street Disaster